The Daily Dow FOOL GLOBAL WIRE by Robert Sheard (TMF Sheard) LEXINGTON, KY. (May 8, 1997) -- I've written about taxes a number of times in recent weeks, since the budget negotiations held out the promise of reduced capital gains taxes. Last week it was announced that an agreement framework was reached, and that capital gains tax cuts were, indeed, in the package. The details have yet to be announced, and require the House Ways and Means Committee to write the new legislation. Some Washington pundits believe we may see the 28% maximum long-term rate shrink to 19.8%, with some indexing of capital gains for inflation (the real killer for long-term investors as you're paying taxes on inflation rather than real growth without such indexing). Senate Majority Leader Trent Lott, however, appears to be pushing for even more significant changes. While Lott hasn't expressed a number for the new rate, he believes they "can do something dramatic in the capital-gains area." One crucial element was announced today (at least tentatively). This morning the chairmen of the House and Senate tax-writing committees proposed that the effective date for the new regulation be set at May 7 (yesterday). If this proposal is approved, all sales of stock from yesterday on would be treated under the new capital gains tax rates, whatever they turn out to be. No one really knows what this will do to the market. Some people fear that the reduction will cause a flurry of selling as long-term investors can finally get out of positions with a lowered tax burden. My personal belief (and this may be worth about as much as my market predictions -- 20,000 on the Dow in a decade) is that there will be little net effect. Yes, some investors will unload long-held positions, but I suspect the proceeds will work themselves back into other issues, creating a net zero-effect for the overall market. Nevertheless, having one piece of the new picture in place (the effective date of the rate change) helps out. Stay Foolish! (c) Copyright 1997, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. ________________________________

The Current BTD 10 AT&T <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:T)") else Response.Write("(NYSE:T)") end if %> *Philip Morris <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:MO)") else Response.Write("(NYSE:MO)") end if %> *Intl. Paper <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:IP)") else Response.Write("(NYSE:IP)") end if %> *General Motors <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:GM)") else Response.Write("(NYSE:GM)") end if %> *Exxon <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:XON)") else Response.Write("(NYSE:XON)") end if %> Chevron <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:CHV)") else Response.Write("(NYSE:CHV)") end if %> Eastman Kodak <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:EK)") else Response.Write("(NYSE:EK)") end if %> Minnesota Mining <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:MMM)") else Response.Write("(NYSE:MMM)") end if %> J.P. Morgan <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:JPM)") else Response.Write("(NYSE:JPM)") end if %> DuPont <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:DD)") else Response.Write("(NYSE:DD)") end if %> NOTE: Foolish four stocks are preceded by an asterisk. Updated Daily

1997 Foolish Four Model Stock Change Last -------------------- T - 1/8 32.50 GM - 3/4 56.75 CHV +1 70.63 MMM +1 3/8 91.13 Day Month Year FOOL-4 +0.26% 0.29% -4.20% DJIA +0.72% 1.82% 10.67% S&P 500 +0.57% 2.36% 10.74% NASDAQ +0.60% 5.56% 3.08% Rec'd # Security In At Now Change 1/2/97 120 3M 83.00 91.13 9.79% 1/2/97 153 Chevron 65.00 70.63 8.65% 1/2/97 179 Gen. Motor 55.75 56.75 1.79% 1/2/97 479 AT&T 41.75 32.50 -22.16% Rec'd # Security In At Value Change 1/2/97 120 3M 9960.00 10935.00 $975.00 1/2/97 153 Chevron 9945.00 10805.63 $860.63 1/2/97 179 Gen. Motor 9979.25 10158.25 $179.00 1/2/97 479 AT&T 19998.25 15567.50 -$4430.75 CASH $431.29 TOTAL $47897.67

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